In addition, Bank of America also agreed to pay $1.52 billion to Washington-based Fannie Mae.

Waters also commented on traders’ reaction to the deal.

“The fact that Bank of America’s stock surged after this deal was announced only serves to fuel my suspicion that this settlement was merely a slap on the wrist that sets a bad example for other negotiations in the future,” said Waters.

Shares of Bank of America jumped 6.4 percent on Wall Street after the deal was announced.